You’ve advised your client to introduce a high-deductible health plan with an accompanying health savings account for its upcoming medical insurance renewal. Congratulations are in order! Your client has just joined the nearly 25% of employers taking this major step towards consumer driven health care.
But your role in implementing the HSA program has just begun. To ensure that your client’s employees maximize the value of their HSAs, the following best practices are essential.
- Practice Total Transparency
The shift to HDHPs from a typical PPO or HMO plan is significant and comes with several caveats that could easily be construed as “negatives” to an uninformed employee.
Make sure that the following points are explained clearly so that HSA participants aren’t caught off guard post-open enrollment: No First-Dollar Coverage.
OK, not all HSA compatible health plans lack first-dollar coverage. But the vast majority do.
(Related: More People Under 65 Have HSAs: CDC)
Employees should be emphatically aware that they will pay out-of-pocket for all medical services — including primary care and specialist visits, with the possible exception of some preventive care services required by the Affordable Care Act — until they’ve met their individual or family deductible.
- Tax Filing Changes
Annual income taxes for HSA participants are filed differently. Employees are required to complete Form 8889 (part of Form 1099SA), which documents any HSA withdrawals and contributions made throughout the year.
- More Skin in the Game
HSAs are designed for a more autonomous consumer. Employees need to know up-front that enrolling in and contributing to an HSA is more involved than signing up for a simple payroll deduction. The HSA holders are taking control of their own health care decisions.
Communicate With Your Audience
Any successful enrollment or new product rollout relies heavily on communication, and getting employees into HSAs is no different.
- Benefits Specificity
Today’s workforce is more diverse demographically than ever. The needs of a 25-year-old recent college grad vary exponentially from those of a 45-year-old parent of two or a 64-year-old soon-to-be Medicare eligible employee. Therefore, HSA education must be tailored on an individual basis using cost-calculators and specific examples.
- Strategic Communications
How does your audience prefer to receive information? Phone, email, mail, in-person? Typewriter? Telegraph?? As a benefits consultant in today’s world, you must be able to communicate with employees and distribute necessary information using any and every channel that your client desires.
- Equip Management, Empower Employees
Open enrollment is a small window. And in today’s competitive marketplace, employers have increasingly less time to devote to benefits. In some cases, you might be able to hold in-person meetings to educate staff on HSAs and field questions. But, more often than not, your interaction at the employee level will be extremely limited, if not non-existent. Especially if your client base consists of mid to large market employers.
- Management – The First Line of Defense
The shift towards employee health care self-reliance in the workplace starts with management.